By SELWYN RAAB
Published: October 14, 1987
Five high-level officials of the carpenters' union were indicted yesterday on charges of extorting more than $100,000 from contractors.
In return for the money, the officials, who control the supply of carpenters in Manhattan, guaranteed labor peace, permitted sweetheart contracts and allowed nonunion workers on multimillion-dollar construction projects, according to the indictment.
Contractors testified before a grand jury that they made payoffs to the union officials to avert labor problems at projects that included the World Financial Center at Battery Park City, Pier 17 at the South Street Seaport, the Equitable Life Assurance Building at Seventh Avenue and 55th Street and exhibits at the Whitney Museum of American Art at Madison Avenue and 75th Street.
''This is the beginning, not the end of a drive to root out corruption in the construction industry,'' District Attorney Robert M. Morgenthau of Manhattan said after the state charges were unsealed. He said his office and state investigators were developing other possible racketeering cases concerning organized-crime figures, contractors and other officials in the carpenters' union and other building-trade unions.
Yesterday's indictments accused the five leaders of Locals 608 and 257 of the United Brotherhood of Carpenters and Joiners of obtaining more than 200 separate payments over a seven-year period, ranging from $50 to $8,000.
Four of the five pleaded not guilty at arraignments yesterday, and the lawyer for one of them said the evidence had been illegally obtained through improper wiretaps.
Mr. Morgenthau said the indictments document only about 10 percent of the payoffs that 17 contractors said they gave because corroborative evidence could be not obtained to support all of the allegations.
The indictments, which stem partly from information provided by an organized-crime informant, included charges of extortion, larceny and bribery against the heads of the two locals.
The locals are the principal carpenters' unions in Manhattan, which in the last decade has seen a boom in the construction of office buildings and luxury apartments. Officials in both locals, industry experts said, could cause costly delays in construction schedules through strikes and slowdowns.
Additionally, it is the union officials - not the contractors - who have the authority to select work crews and therefore can determine in a tight labor market which construction company gets the most skilled and experienced carpenters. Shooting Tied to Mob
A key figure in the investigation, John F. O'Connor, the vice president and business manager of Local 608, was indicted on 127 counts. Mr. O'Connor was shot and wounded in an apparent murder attempt in May 1986 that investigators said was in retaliation for his ordering vandalism at the Bankers and Brokers restaurant in Battery Park City in February 1986.
State and city law-enforcement officials said Mr. O'Connor tried to coerce the restaurant owners to use union carpenters or to make illegal payoffs for employing nonunion labor. But, according to the officials, Mr. O'Connor was unaware that a member of the Gambino crime family had an interest in the restaurant and the shooting was reportedly approved by John Gotti, who law-enforcement authorities say is the head of the Gambino family.
The indictment supersedes a previous one for extortion against Mr. O'Connor and charges him with directing the vandalism of the restaurant, which caused $30,000 in damages.
The new indictment charges Mr. O'Connor with extortion and accepting separate bribes of up to $5,000. According to the charges, he threatened contractors that he would withhold skilled employees or create labor unrest. Stealing From Union Is Charged
Additionally, he was accused of stealing from his own union by accepting illegal payments for permitting nonunion carpenters to be employed at lower wages than union members.
In one count, Mr. O'Connor, who received $102,900 in salary and business expenses from the 5,200-member local, the largest carpenters' unit in the country, was accused of providing nonunion carpenters, including illegal aliens, for a $400 payment. Another count said he tried to coerce a contractor into perjuring himself before a grand jury about a $2,000 payoff.
Mr. O'Connor, who is 51 years old and lives on Blueberry Drive in Brewster, N.Y., was the chief executive of Local 608 until he was shot last year. At his arraignment yesterday, he pleaded not guilty before Justice George F. Roberts in State Supreme Court in Manhattan and was released, with his previous bail continued at $500,000.
After the arraignment, John W. Mitchell, a lawyer for Mr. O'Connor, said of the evidence, ''The wiretaps underly the entire case and we claim they were unlawfully obtained.'' Help From an Informant
An informant for the State Organized Crime Task Force, Dominick Lofaro, who was an associate in the Gambino group, provided information in 1983 that led to the wiretapping and bugging by authorities of the offices of Local 608 at 1650 Broadway in Manhattan and of Local 257 at 157 East 25th Street.
Martin Forde, a Local 608 business agent, was charged with extortion and soliciting a $2,000 bribe. Mr. Forde, of 39-50 50th Street, in Woodside, Queens, pleaded not guilty and was released on a $25,000 bond.
A separate 79-count indictment was handed up against Eugene Hanley, the president of Local 257, and Attilio Bitondo, the local's vice president. They were charged with extortion from 1977 to 1987, mainly by threatening to put contractors out of business unless payoffs were made. The indictment said that the largest individual demand by Mr. Hanley and Mr. Bitondo was for a bribe of $25,000 and that the highest payoff they got was $8,000. Bitondo Not Arrested Yet
Mr. Hanley of 196 Nelson Street, in the Red Hook section of Brooklyn, pleaded not guilty and was released on bail and a personal recognizance bond of $500,000. Mr. Bitondo, of 5 University Place, in Great Neck, L.I., was not arrested yesterday and authorities said he was expected to surrender today.
Last year, Mr. Hanley received $114,500 in salary and expenses, and Mr. Bitondo, $116,500.
The second-ranking official of the New York City District Council of Carpenters, Irving Zeidman, was indicted for taking about $2,300 in payoffs since 1979. Mr. Zeidman was accused of soliciting the payments as business agent for Local 2155, which has jurisdiction over carpentry work in machine shops.
He also is the first vice president of the district council, the negotiating organization for about 30,000 carpenters and administers the health and pension funds of the locals.
Mr. Zeidman, of 3225 Shore Parkway in the Brighton beach section of Brooklyn, pleaded not guilty and was release in his own recognizance. A Perjury Charge
A sixth official, William Holden, the chief shop steward for Local 608 at Battery Park city, was charged with perjury and criminal contempt in connection with his testimony before the grand jury that heard evidence about the Bankers and Brokers incident. Mr. Holden, of 660 Hillsdale Avenue, Hillsdale, N.J., pleaded not guilty and was released in bail and personal recognizance bond of $25,000.
The three-year inquiry was conducted mainly by Mr. Morgenthau's office, the Organized Crime Task Force and the the Inspector General's office of the Federal Labor Department.
Contractors cited in the indictment for making illegal payments included: Dieter Sonneberg of the B & S Woodworking Company, at the World Financial Center; Robert Donaldson of Donaldson Acoustics, at Pier 17; Roger Berk of the Haywood-Berk Flooring Company, at the Equitable Life Assurance Building and the Whitney Museum. Authorities said they had cooperated with the investigation.
Wednesday, October 14, 1987
By SELWYN RAAB